Sheepmeat prices tumble while beef prices stay near all-time high

New Zealand lamb export returns reached a record high of $589 million for the quarter, up 12 per cent on the same period in 2014. Photo / Michael Craig

Dry conditions helped drive lamb and mutton returns down in the December quarter, while beef prices remained at near record levels, says Beef and Lamb New Zealand.

The farmer-funded industry group said the fall in sheepmeat prices was normal for the time of year, but that the decline was made worse by dry conditions, which led to an increase in production over the quarter.

Weaker-than-expected markets, particularly for frozen exports, resulted in lower average export receipts. Returns were also weaker for lamb co-products and sheepskins.

Beef and Lamb said prices for cattle remained at near-record high levels after several months of increases in 2015 but were expected to start easing as United States demand for beef slowed.

Export revenue from red meat reached a record high over the quarter. The record was driven by increased shipments but average per tonne values were down, despite the New Zealand dollar's depreciation.

Beef and veal exports generated $682 million in the December quarter, up 14 per cent from the same period last season (there was a 15 per cent increase in shipments, while the average value was down 1 per cent).

Exports to North America, the largest destination for New Zealand beef and veal exports, remained unchanged from the previous season - at levels 33 per cent higher than the five-year average.

However, the average value of exports to North America was down 8.2 per cent, despite a 15 per cent depreciation of the kiwi against the US dollar over the period.

The decline reflected a 14 per cent drop in processing beef's average value, which was partly offset by rises in the average value of other cuts.

A strong north Asian appetite for New Zealand beef and veal led to a 55 per cent increase in shipments and a 7.3 per cent rise in the average value over the quarter.

Beef and veal exports to north Asia totalled 31,000 for the quarter - nearly equivalent to the five-year average volume exported to North America for the same period.

New Zealand lamb export returns reached a record high of $589 million for the quarter, up 12 per cent on the same period in 2014.

Demand was particularly strong in the European Union and north Asia, where shipments increased by 24 per cent and 18 per cent, respectively.

In the case of north Asia, the rise in shipments coincided with a 16 per cent drop in average value, highlighting the economic slowdown and uncertainties in China, Beef and Lamb said.

This downward trend in the average value hides differing performance for chilled and frozen lamb exports.

The average value of chilled lamb exports improved by 4.5 per cent, while the average value of frozen lamb exports dropped 8.5 per cent. Mutton exports averaged $5070 per tonne, 6.5 per cent down on a year earlier.